If you currently receive worker’s compensation and find out your company is closing, you may wonder what will happen to your payments. The short answer is you will continue receiving payments even if the company that held the insurance policy no longer exists.
Is Worker’s Comp Safe From Closure?
In the event of your company closing, you will still receive insurance payouts. This is because worker’s compensation does not come out of your employer’s bank account. Your payments come from a worker’s compensation insurance coverage program, carried by a private entity. None of the money you receive actually comes out of your company’s pocket. As with auto insurance, everyone has to pay in, but not everyone uses the coverage. This system ensures money will be available for those who need it and qualify for it.
Issues With Workers’ Comp When Company Closes
There are some circumstances in which you may have difficulty collecting your insurance payouts. If you just filed a claim and it is pending, it can take longer to receive your initial payment, as your former employer may not provide necessary information to the insurance agency in a timely manner. If you encounter delays with a pending worker’s comp claim when your company goes out of business, contact us. The sooner you start receiving payments, the better.